Employee Financial Wellbeing a Concern as UK Workers May Not Be Able to Afford Retirement

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Employee financial wellbeing is frequently being talked about, especially with the rising cost of living. An increasing number of people in full-time employment are afraid they will never be able to afford to retire, according to new research.

Below, we discuss what the statistics reveal, the importance of employee financial wellbeing, and how employers can help to support this going forward.

Employee Financial Wellbeing and Retirement Plans Have UK Workers Worried

New figures recently released by retirement specialists WEALTH at Work have revealed some startling stats about employee financial wellbeing. According to the data, 39% of full-time employees believe they will never be able to afford to retire due to the rising cost of living. This is an increase of 6% in only 12 months, with almost half of those aged 35-44 feeling this way.

Further, the figures show that 81% of employees worry that they will have to work longer, with 32% already considering delaying their retirement. 81% also believe they will be less comfortable once they retire because their savings fail to meet rising costs.

Small Changes Now Can Lead to Better Financial Positions in the Future

Results of the research also demonstrate some concerning trends with respect to the support available for employee financial wellbeing. 41% of employees do not feel supported by their employers concerning getting help about their finances. Only 14% of employees would consider discussing their finances with their employer, whilst 54% would sooner seek pension advice from family or friends rather than someone qualified.

Read: Ethnic Minorities Less Likely to Have Pension Plans and
More Likely to Have Retirement Plans, SMF Survey Says

WEALTH at Work director Jonathan Watts-Lay has spoken about the importance of being financially prepared for later life. He states: “Many don’t realise the significant difference a small increase to their pension savings can make.” He adds: “This may not feel affordable but making small changes such as setting a household budget, shopping around and not auto-renewing on things like car insurance, as well as utilising workplace benefits i.e. discount schemes, really can make a huge difference.”

What Is Employee Financial Wellbeing and Why Is It Important?

There are several factors which make up employee financial wellbeing. Chief of these are feelings of control and security with respect to one’s finances. These, in turn, are typically achieved by the ability to maximise one’s finances on a daily basis, manage unexpected occurrences, and have confidence with respect to one’s financial future. Poor employee financial wellbeing can cause anxiety, stress, and depression.

Employee financial wellbeing has a significant impact on the workplace. According to The Financial Wellbeing Index, 94% of employees across the UK have financial concerns. Over three-quarters of these admit that these concerns affect them at work, and 28% of all employees are not happy about the state of their finances.

Read: National Living Wage to Increase in 2024 But it May Still Fall Short of Real Living Wage

Given that such effects can result in poor physical and/or mental health, it is scarcely surprising that 4.2 million workdays are lost to sick leave resulting from a lack of financial wellbeing each year. Similarly, research conducted by Champion Health shows that financial stress impacts productivity at work for one in five employees.

Champion Health’s head of performance Jack Green is unsurprised by this information. He states: “Employees who are tired, or in a bad place mentally, will not perform to their best. On the flip side, those employees who are thriving personally will also thrive professionally.”

How Can Employers Help Support Employee Financial Wellbeing?

There are multiple ways in which employers can support their employee’s financial wellbeing.

Create a Space For Discussing Financial Wellbeing

The first step is to generate a culture of openness and approachability with respect to discussing finances and any financial problems. Encouraging employees to disclose any concerns they have and establishing and promoting a clear structure for internal advice and assistance will help employees feel more comfortable with talking about their financial wellbeing in the workplace and seeking the support they need.

It is essential to appreciate that every employee’s financial position will be different. Taking the time to understand each employee’s individual situation and concerns will help employers provide the right kind of support for them. To achieve this, employers might encourage line managers to facilitate discussions of financial wellbeing and/or make this part of an established process such as routine meetings/appraisals.

Offer External Support and Guidance

Another step to support employee financial wellbeing is to signpost employees to external sources for advice and assistance. Often, employees suffering from financial pressure feel lost and unsure where to turn for help. Providing guidance on the different types of external support available and the ways in which each can be accessed will assist with this.

Read: Aviva Urges Government to Support Young Pensioners

Whilst it is important to provide employees with long-term financial support, such as pension and share schemes, the here and now is of equal importance. For some employees, it is difficult to focus on the future if they are suffering from financial pressure today.

Employers might consider offering more immediate financial support to assist with this. Providing support with debt repayment, on-demand pay, and/or easy access saving solutions are just a few examples of help that employers may consider offering to their employees.


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